Welltower Inc. stock research
FY2023 Q3
Welltower (WELL) Gross Margin — Quarter Ended Sep 30, 2023
Revenue in the current quarter was stable compared to the preceding quarter, while gross profit rose slightly. However, cost of revenue increased, causing gross margin to weaken modestly. Relative to the same quarter one year earlier, revenue and gross profit were lower, cost of revenue was higher, and gross margin declined substantially.
Gross margin takeaway
Quarter ended Sep 30, 2023 · FY2023 Q3
Revenue in the current quarter was stable compared to the preceding quarter, while gross profit rose slightly. However, cost of revenue increased, causing gross margin to weaken modestly. Relative to the same quarter one year earlier, revenue and gross profit were lower, cost of revenue was higher, and gross margin declined substantially.
- The most observable margin driver is the change in cost of revenue. Revenue was unchanged sequentially, but the cost of revenue rose, compressing gross margin.
- Compared with the immediately preceding quarter, gross margin weakened slightly as cost of revenue growth offset a modest improvement in gross profit. Against the same quarter one year earlier, gross margin was significantly lower, driven by a combination of lower revenue and higher cost of revenue.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
17.0%
Gross profit
$204.5M
Revenue
$1.2B
Cost of revenue
$995.3M
Quarter-over-quarter change
-0.3 pts
Year-over-year change
-21.1 pts
Quarterly gross margin trend
A four-quarter view of the revenue and direct-cost bridge behind gross margin.
| Period | Revenue | Gross profit | Cost of revenue | Gross margin |
|---|---|---|---|---|
| Mar 31, 2023 | $1.1B | $173.9M | $957.8M | 15.4% |
| Jun 30, 2023 | $1.2B | $200.8M | $958.7M | 17.3% |
| Sep 30, 2023 | $1.2B | $204.5M | $995.3M | 17.0% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Jun 30, 2023
-0.3 pts
Year-over-year change
Sep 30, 2022
-21.1 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The most observable margin driver is the change in cost of revenue. Revenue was unchanged sequentially, but the cost of revenue rose, compressing gross margin.
Compared with the immediately preceding quarter, gross margin weakened slightly as cost of revenue growth offset a modest improvement in gross profit. Against the same quarter one year earlier, gross margin was significantly lower, driven by a combination of lower revenue and higher cost of revenue.
Monitor the trajectory of cost of revenue relative to revenue, as any further increase could continue to pressure gross margin.